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Bankruptcy Law/Chapter 13 negotiate with creditors


Thank you for taking your time to provide this service. It is very much appreciated.
 We have just started our 4th year of 5 years in Chapter 13. We have already paid 100% to all secured creditors and are in the process of paying 45% to unsecured creditors. Our mortgage is paid outside the plan and was never in arrears. We have $19,000 left (12 months) to fulfill our 45% obligation which will be 1 year earlier than scheduled because one creditor did not file a claim. I am told that we will have to keep paying thru to the end of the plan (5 years) and the unsecured creditors will just get a little more.
 My question is, in the event I get a gift from a relative of $19,000 can I negotiate with these unsecured creditors outside the plan to pay them the money now for what they would have to wait to get over the next year? Also, would they know or have been told that they are in line to be getting more than the original 45%.
Thank You

In your case, I don't see that paying outside the plan will help you.  You could pay and then dismiss the case, but that would mean that any unpaid creditors (or creditors only partially paid) could come after you for the rest owed.  If you don't dismiss, you have to pay the trustee per the plan, and the trustee will pay all creditors, even late claims.  It's not worth it, I'm afraid, unless you can get releases from all your creditors.

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Michael T. Hertz


I am already listed as a volunteer under "Collections Law," but actually I am a bankruptcy lawyer. I am a member of bar in California and in Massachusetts and have practiced in bankruptcy since 1978 and have also taught bankruptcy law at the law school level (in Maine and Oregon). I can answers questions with respect to all bankruptcy chapters, having represented creditors, debtors, trustees, creditors committees, and persons involved in defending actions in bankruptcy court.


See above. Basically, 33 years of experience.

inactive member of State Bar of California; inactive member of bar in Massachusetts; former member of bar in Maine; former conseil juridique in France.

California Bankruptcy Law Review; Georgetown Law Journal; numerous others. See my resume.

Harvard Law School, J.D.; Pomona College, B.A.

Awards and Honors
Superlawyer in Northern California, 2005 and 2006

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